Correlation Between Civista Bancshares and Parke Bancorp
Can any of the company-specific risk be diversified away by investing in both Civista Bancshares and Parke Bancorp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Civista Bancshares and Parke Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Civista Bancshares and Parke Bancorp, you can compare the effects of market volatilities on Civista Bancshares and Parke Bancorp and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Civista Bancshares with a short position of Parke Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Civista Bancshares and Parke Bancorp.
Diversification Opportunities for Civista Bancshares and Parke Bancorp
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Civista and Parke is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Civista Bancshares and Parke Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parke Bancorp and Civista Bancshares is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Civista Bancshares are associated (or correlated) with Parke Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parke Bancorp has no effect on the direction of Civista Bancshares i.e., Civista Bancshares and Parke Bancorp go up and down completely randomly.
Pair Corralation between Civista Bancshares and Parke Bancorp
Given the investment horizon of 90 days Civista Bancshares is expected to generate 1.03 times less return on investment than Parke Bancorp. But when comparing it to its historical volatility, Civista Bancshares is 1.05 times less risky than Parke Bancorp. It trades about 0.06 of its potential returns per unit of risk. Parke Bancorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,606 in Parke Bancorp on September 1, 2024 and sell it today you would earn a total of 755.00 from holding Parke Bancorp or generate 47.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Civista Bancshares vs. Parke Bancorp
Performance |
| Timeline |
| Civista Bancshares |
| Parke Bancorp |
Civista Bancshares and Parke Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Civista Bancshares and Parke Bancorp
The main advantage of trading using opposite Civista Bancshares and Parke Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civista Bancshares position performs unexpectedly, Parke Bancorp can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Parke Bancorp will offset losses from the drop in Parke Bancorp's long position.| Civista Bancshares vs. Home Federal Bancorp | Civista Bancshares vs. First Financial Northwest | Civista Bancshares vs. First Northwest Bancorp | Civista Bancshares vs. First Capital |
| Parke Bancorp vs. Sound Financial Bancorp | Parke Bancorp vs. Finward Bancorp | Parke Bancorp vs. Franklin Financial Services | Parke Bancorp vs. Community West Bancshares |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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